A Wary Leader in Superconducting

By BARNABY J. FEDER,

Published: May 4, 1991

GUILDERLAND, N.Y.—
Business is better than ever at the Intermagnetics General Corporation, with the latest profits easily setting a company record. But those who follow the company wonder how long it can remain the world's leading independent supplier of products based on superconductivity.

Superconductivity -- a mysterious phenomenon of materials that lose all resistance to electricity and create powerful magnetic fields -- has become one of the hottest areas of research thanks to the discovery in 1986 of ceramic conductors.

Now, many of the world's largest technology companies want to compete with Intermagnetics. "Intermagnetics knows a lot about the nooks and crannies of the business, but you can't compare their research budget with that of the giant companies doing superconductivity research today," said Sheldon Grodsky of Kenneth Jerome & Company, one of the few analysts who follows the company. "There's always a chance that Intermagnetics' greatest technological strengths will suddenly become unimportant." Best Earnings Yet

Intermagnetics reported in March that it had income of $1.75 million on sales of $45.5 million in the first nine months of its fiscal year, more than it had ever earned for a full year in its 20-year existence. The company says that its experience in making superconducting products will remain an advantage over larger competitors even if the underlying technology changes. But the company's current prosperity is based on mastery of superconducting metal compounds that must be cooled to lower temperatures than the ceramics.

All three types of products the company makes are in strong demand from medical equipment companies that assemble magnetic resonance imaging, or MRI, systems. "Magnets, wire and refrigeration are all clicking now," Carl H. Rosner, chief executive, said at the company's headquarters here near Albany.

MRI devices create strong magnetic fields in which every element reacts with a unique signature. By scanning with an MRI system, a doctor can pinpoint tumors or track blood flow, among other applications. This technique is safer than X-rays and often more revealing.

The metal compounds that go into today's MRI systems and research devices were discovered 30 years ago. They become superconductive at about minus 250 degrees Centigrade, just 23 degrees above absolute zero -- a temperature achieved only by submerging the metals in liquid helium, one of the coldest known substances.

The superconductive ceramics were discovered in 1986 by researchers at the International Business Machines Corporation. They become superconductive at somewhat higher temperatures, close to those attainable with baths of liquid nitrogen, a far less expensive material than helium.

I.B.M.'s discovery awakened old dreams of achieving superconductivity cheaply enough to create magnetically levitated high-speed trains, long-distance power transmission without energy loss and miniature supercomputers. It also ignited a worldwide research race.

Several promising ceramics that become superconductive at temperatures warmer than liquid nitrogen were synthesized within months. Now, scores of universities, government laboratories and multinational companies with research budgets that dwarf Interagnetics' annual income are experimenting with methods for turning the new superconductors into everything from wire to microchips. Spun Off From G.E.

Mr. Rosner professes to feel no threat, calmly trusting his experience over the musings of stock analysts. A 62-year-old native of Hamburg, Germany, he ran the superconductivity research program that the General Electric Company spun off from its research laboratory in nearby Schenectady to form Intermagnetics in 1971. He too is excited by high-temperature superconductivity research -- the company takes part in several projects -- but he says commercialization of the new ceramic superconductors is at least five years off.

Mr. Rosner contends that the skills of Intermagnetics in product design and manufacturing are difficult to match, and will be more important in exploiting the new superconductors than pure scientific expertise. The company makes superconducting magnets from several thousand parts that take months to assemble, to such exacting standards that the slightest defects can render them worthless. With such talents, Mr. Rosner said, "We will be in a position to jump on a new superconductor technology bandwagon faster than anyone else."

Intermagnetics has plenty of experience playing catch-up. The company survived its early years on a diet of research projects, most notably for Energy Department programs in nuclear fusion. But when MRI became the first commercial use of superconductivity in the early 1980's, it was Oxford Instruments, a British company, not Intermagnetics, that seized the initial opportunities.

Intermagnetics has never managed to overtake Oxford, which sold a majority interest in its superconducting magnet business to Siemens, the German multinational, in 1989. Its first attempt fell apart in 1984 when product defects soured relations with both G.E. and Philips, the Dutch multinational.